TAMPA, Fla. -- U Save Supermarkets here has at least doubled its doughnut sales with the addition of Krispy Kreme brand products, officials said.
And that's with a higher retail price. U Save had sold its own glazed doughnuts for $1.99 a dozen; Krispy Kreme's are $3.95.
The key to the sales success is the brand, because it's a brand Southerners know and love, said Ginger Edwards, deli-bakery director for the 21-unit chain.
"We knew it would work, but we didn't expect it to take off so quickly, and sales are still growing steadily," Edwards said.
The chain took on the branded doughnuts, which are delivered fresh every day, just before the Christmas holidays. Sales have built since then at a rate that has surprised both U Save and Krispy Kreme officials, the deli-bakery director said.
In addition, since U Save had previously finished off their own prefried doughnuts in store, the arrangement with Krispy Kreme frees up bakery staffers to do other chores.
In fact, the chain is now bringing its bakery crew in later in the morning. Its strategy is to put the bakers to work turning out other fresh-baked products in the afternoon to complement a newly launched meals program [see U Save Stores Dish Up fresh .
U Save has completely supplanted its previous doughnut program with the Krispy Kreme products. It was tough to make money with the previous program, because a change in merchandising strategies had put the brakes on sales, Edwards said.
"When we went to self-service in most of our bakeries, it killed my doughnut business -- until now. People just don't like to buy their doughnuts from a self-service case, but it's different with the Krispy Kreme brand. They'll buy Krispy Kreme from the self-service case because they know the name," Edwards said.
She described how U Save alerts customers to the fact that its stores now carry the sought-after brand.
"We use a magnetic strip on the front window of the store. It's big, about 20-by-9 inches, and it has the Krispy Kreme green and red and white logo on it. We'll also be getting an A-frame sign out front."
The doughnut boxes display the logo, too. The Krispy Kreme doughnuts are packed laid flat in square boxes that look similar to pizza boxes.
U Save's bakery-deli departments are situated at the back of the store. Some U Save units, however, display a few boxed dozens of Krispy Kreme doughnuts up front, on tables near the store's entrance, in addition to a display in the bakery, Edwards said. Some U Save stores merchandise the doughnuts in their service case; others in a doored self-service unit. Just 12 of the chain's stores -- those located in and near Tampa -- carry the Krispy Kreme doughnuts at this time, because the logistics of everyday delivery have not yet been worked out for other units that are "way off the beaten path," Edwards said.
"We want the product in our other stores, and we're talking to Krispy Kreme about how they can do it," Edwards said.
Throughout central Florida, Krispy Kreme doughnuts are delivered every day to units of convenience store chains that have branded partnerships with Krispy Kreme Tampa. So the company's distinctive green, red and white logo is seen all over.
Consequently, Floridians and visitors to Florida have come to know the brand over the last several years, Edwards said. In fact, SN has talked to consumers in the Northeast who bring back boxes of Krispy Kreme doughnuts when they visit the South.
Even die-hard bagel-eating New Yorkers have embraced the doughnuts, since an entrepreneur secured Krispy Kreme franchise rights two years ago and began opening doughnut shops around Manhattan and in key commuter hubs.
"Krispy Kreme has tremendous drawing power, because it's been an institution in the South for years and years. The brand is good for U Save because it draws people into the store," said Hank Eckinrode, sales and marketing manager for Krispy Kreme Tampa, an affiliate of Krispy Kreme corporate, which is based in Winston-Salem, N.C.
Krispy Kreme Tampa approached U Save last fall with the idea of forming a branded partnership, and the chain was quickly receptive, said Eckinrode.
In the chain's relationship with Krispy Kreme, one of the requirements is a minimum weekly order of product, and U Save was getting more product delivered than they were selling in the beginning, Edwards said.
But now, stores are ordering twice -- and some more than that -- the minimum order, she said.
"If a store calls us in the morning, we can increase its order for that night. We're getting calls now almost every day to increase the next order," Eckinrode said.
He said some of U Save's stores are selling up to 50 dozen doughnuts a day on a busy weekend.
Krispy Kreme Tampa, which turns out nearly 600 dozen yeast doughnuts an hour at its facility here, sells products to other supermarkets in Florida, but none except U Save has a branded partnership agreement with the doughnut maker. That means they sell the products generically, without the benefit of identifying them with the Krispy Kreme brand.
Its success with U Save has encouraged Krispy Kreme Tampa to seek branded partnership agreements with other supermarkets, Eckinrode said.
The corporate Krispy Kreme has such an agreement with some divisions of Kroger Co., Cincinnati, Eckinrode said.
